Energy Bidding Quadratic Model and the Use of the B-Loss Matrix for Determining Consumer Energy Price

Abstract

The liberalization trend has led to electric restructuring in market industries. At the start of the 1990s, it was recommended to shift the electricity business from a monopoly to a competitive system. The electric power problem becomes more complex from competition because competitors must be ready to win or lose. The method that has succeeded in determining energy prices in competition is the locational marginal price method implemented by the New York Service Operator. In general, the characteristic of the supplier offers are in step function forms, so optimizing prices and allocating transmission losses are a problem. This paper proposes a method for determining electrical energy prices on the consumer side in each location. The method uses a quadratic approach to perform direct method optimization. The transmission losses are calculated through the B-loss matrix approach, and then allocations of the transmission losses are separated with the proportional method. Simulation results for three locations with six suppliers, as well as on a larger scale (118 buses, 54 generators) were obtained.